Yun Li, Silvia Amaro
Around 5 a.m. ET Tuesday, futures on the Dow Jones Industrial Average indicated an opening surged of more than 900 points on Tuesday. S&P 500 futures and Nasdaq-100 futures also pointed to a sharply higher open for the two indexes on Tuesday.
Stock futures erased big losses and turned positive after President Donald Trump floated the idea of “a payroll tax cut or relief” to offset the negative impact from the coronavirus. The potential tax incentives come on top of an $8.3 billion spending package Trump signed last month.
The market suffered a historic sell-off in the previous session, with the Dow and the S&P 500 plunging 7.8% and 7.6, respectively, both posting their worst day since 2008. The Dow’s 2,013-point drop was also the biggest point drop for the 30-stock average ever.
The deep stock rout is putting the record-long bull market in jeopardy. With Monday’s drop, the S&P 500 is 19% below its intraday all-time high of 3,393.52 from Feb.19. The benchmark would fall into bear market territory if it slumps 20% from its peak or more.
Oil prices move higher
That came after a shocking all-out oil price war roiled markets already on edge about the economic fallout from the fast-spreading coronavirus. Oil posted its worst day since 1991, with the WTI plunging more than 24% Monday, after Saudi Arabia slashed crude selling prices for April following the collapse in OPEC talks.
Monday’s monster sell-off triggered a key market circuit breaker that resulted in a 15-minute pause in trading early in the session.
Investors continued to seek safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note dropped below 0.5% for the first time ever, while the 30-year rate breached 1%. At one point early Monday, the 10-year slid to 0.318%.
Earnings, data, Michigan votes
Meanwhile, the race for the White House continues in Michigan on Tuesday evening. The state is a watershed moment in the Democratic primary race.
—CNBC’s Eustance Huang contributed to this report.